Jakarta, 27 August 2025 – Indonesia today opened a new chapter in Islamic social finance with the launch of the Green Zakat Framework, a pioneering instrument developed in collaboration between the National Zakat Board (BAZNAS), Bank Syariah Indonesia (BSI), and United Nations Development Programme (UNDP) Indonesia. The framework was officially handed over to the Ministry of Religious Affairs, marking its formal adoption as a strategic reference for the Government of Indonesia, integrating zakat with green and environmental principles.

Indonesia has set ambitious targets to achieve its Sustainable Development Goals, requiring an estimated USD 8.7 trillion in financing and a funding gap of USD 1.7 trillion. Of this, USD 281–285 billion is required to meet the country’s climate targets under its Enhanced Nationally Determined Contribution (ENDC). Meeting this financing need is a challenge that also opens space for innovation and collaboration. The Green Zakat Framework presents a unique opportunity to mobilize faith-based and community-driven resources, ensuring that zakat contributes not only to poverty alleviation but also to advancing sustainable development and climate action.

“We are driven by a vision to position Indonesia as the center of a new Islamic civilization in the future. The baton of leadership in Islamic civilization belongs to Indonesia. We have the most stable economy, the most stable political climate, and the most harmonious society—despite being one of the most pluralistic nations. We are the most harmonious country in the world today,” said Prof. Dr. KH. Nasaruddin Umar, Minister of Religious Affairs of the Republic of Indonesia.  He further expressed hope that the Green Zakat Framework, launched today, would serve as a powerful tool to strengthen the economic foundation of the Muslim community while also supporting environmental sustainability.

With a growing national zakat collection of approximately USD 2.53 billion and waqf funds reaching around USD 216 million, Islamic social finance holds untapped potential to support both social and environmental goals. The framework outlines how zakat can be directed toward climate-sensitive programming, such as renewable energy, sustainable agriculture, and ecosystem restoration, while maintaining its core mission of uplifting vulnerable communities.

President Director of Bank Syariah Indonesia, Anggoro Eko Cahyo, reaffirmed the bank’s commitment to sustainability as a core focus area in his opening remarks. “At BSI, we consistently prioritize initiatives that promote public welfare and long-term sustainability in all aspects of our business and operations. The Green Zakat Framework is a strategic solution aimed at fostering broader institutional collaboration and encouraging greater public participation in zakat. With Indonesia’s zakat potential reaching Rp327 trillion, this initiative is expected to help optimize that potential and deliver wider benefits for the community,” he stated.

The launch event featured a panel discussion titled “Institutionalizing Green Zakat and Green Waqf: Turning Ethical Finance into Environmental Action.” Panelists from government, religious institutions, Islamic banking, and civil society explored how zakat and waqf can be institutionalized to drive environmental action. Discussions highlighted the importance of integrating green principles into zakat management systems, ensuring impact measurement, transparency, and long-term sustainability.

“Zakat has long been a pillar of justice and solidarity, helping reduce inequality within communities. Traditionally, it has provided immediate relief such as food, agricultural products, or cash assistance to those in need. Through this framework, Zakat goes further, supporting initiatives like renewable energy for villages, sustainable farming, and women-led enterprises that create lasting income and resilience. By integrating environmental stewardship into zakat distribution, we are equipping communities for a more sustainable future, showcasing the true power of Islamic social finance to serve both people and the planet,” said Ms. Sujala Pant, Deputy Resident Representative of UNDP Indonesia.

Turning the Green Zakat Framework into action calls for innovation, collaboration, and represents a whole shift in mindset. In a time of growing environmental and social vulnerability, Islamic social finance must grow to meet the challenge. With the implementation of green zakat, it encourages communities to become active agents of change, where environmental stewardship is seen as part of spiritual responsibility. the implementation of green zakat, it encourages communities to become active agents of change, where environmental stewardship is seen as part of spiritual responsibility.

Prof. Dr. KH. Noor Achmad, Chairperson of BAZNAS Indonesia, reiterated the importance of collaboration in implementing the Framework, stating “BAZNAS warmly welcomes the Green Zakat Framework, as it aligns with our mission to help others and strengthen solidarity within the community. BAZNAS calls all stakeholders to prioritize environmental aspects in zakat management to ensure that zakat sustains its contribution to poverty alleviation while preserving the environment and building resilience for future generations.”

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About UNDP: 
UNDP is the leading United Nations organization fighting to end the injustice of poverty, inequality and climate change. Working with our broad network of experts and partners in 170 countries, we help nations to build integrated, lasting solutions for people and the planet. Learn more at undp.org or follow at @UNDP.

Contact Information: 
Nila Murti, Team Leader of Financing for Development (nila.murti@undp.org)
Nabilla Rahmani, Head of Communications, UNDP Indonesia (nabilla.rahmani@undp.org)